Task team to identify best funding model for cities
Johannesburg Member of the Mayoral Committee for Finance Councillor Geoffrey Makhubo has announced the establishment of a task team to weigh and assess all the input made at the three-day “Innovation in Financing South African Cities Conference” held at the Sandton International Convention Centre last week.
About 100 local and international delegates attended the conference, organised by the City of Joburg in partnership with the Paris-based Global Fund for Cities Development (FMDV) to explore appropriate “pooled financing mechanisms” to help African cities create alternative funding sources for infrastructure development.
FMDV was established in October 2010 at the initiative of the Metropolis and United Cities and Local Governments (UCLG). It has 34 founding members.Speakers at last week’s conference included Johannesburg Executive Mayor and chairman of the South African Local Government Association Councillor Parks Tau; Gauteng MEC for Finance Barbara Creecy; Johannesburg City Manager Trevor Fowler; Development Bank of Southern Africa’s General Manager: Infrastructure Finance Tshepo Ntsimane; Gonete Abebe Zeluel of the Ethiopian Ministry of Urban Development, Housing and Construction; David Painter of Evensen Dodge International Incorporated and Eric Wood of Regiments Capital.
Municipalities that presented their funding needs were Johannesburg, Tshwane, Ekurhuleni, eThekwini and Nelson Mandela Bay.
The speakers – who represented a wide range of interested parties, including developmental funders and financiers – tabled a variety of funding models for examination by conference.
Delivering his closing remarks on Friday, MMC Makhubo, who is also Vice-President of the FMDV, said it was critical to find other “pooled financing mechanisms” to bridge the funding divide local governments were facing, especially in the area of urban infrastructure. He said contributions made at the conference would form part of the work of the task team, which will also make a determination on the best model or financing structure suitable for the South African environment, taking into account the different levels of development of the country’s municipalities.
“We call on everyone, from provincial to national government, to support and provide guidance in respect of the best model for the respective municipalities. We will also learn from the experience of other countries,” said MMC Makhubo.
The MMC also called for a relook at the interest charged by lending institutions, and also a change of culture when dealing with municipalities “so as to strengthen development patterns and help make these sustainable”.
“There is also the need for more influence and bargaining capacities with our funding partners to lower the cost of debt and improve ability to access funding for both metros and local municipalities,” he said.